USDJPY Forecast For 2017

Forex The Big Players

I found this chart on wikepidia, not the best of sources but as far as i can tell it is about right. It shows how the total market is dominated in just a few players, indeed the top ten have 65% of the market leaving the hundreds of other banks and traders fighting for whats left.

The Analysis

I spent several hours trawling the internet and looking at the forecasts that have been published by as many banks as I could find. I could't get them all but I did find information from more than 80.

The Banks Disagree

The most dollar bullish major bank I could find was BNP Paribas who have the USDJPY at 128 by years end, the most bearish was JP Morgan who have the pair at 99 in the same time frame. Considering we are at 113 at the time of writting that is an incredible difference. One wonders what chance any of us retail traders have of being correct! However we must remember that if it was easy to forecast currency movements there would not be any money to be made.

This spreadsheet shows a representative selection of the data from the 84 banks i managed to collect publised information from, 40% of banks were USDJPY bearish and the rest bullish apart from 2 dealers who had no change from todays 113.

The weighted average is an average of all forecasts adjusted for the market share of the bank making the forecast(acording to a mixture of wikepedia and my best guess). So the CITI forecast has far more weight than the Morgan Stanley forecast which in turn has more weight than TD Securities.

The Amazing Result: USDJPY Forecast No Change

I was really surprised to see that the weighted average of all the banks forecasts virtally no change to the USDJPY over the coming year despite no major bank having that as its forecast. Credit Suisse are the closest to the average of all the majors. I think we can take away from this that there is no consensus for this pair going forward, nobody is yet sure what a Trump presidency means for the US economy and hence for us traders it could well be a profitable year as we react to what is happening.

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